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Kimco First-Quarter FFO Falls 8.6% as Deal Income Unrepeated

May 4 (Bloomberg) -- Kimco Realty Corp., the largest U.S. owner of community shopping centers, said funds from operations fell 8.6 percent in the first quarter as some income from transactions a year ago wasn’t repeated.

FFO, which gauges a property company’s ability to generate cash, decreased to $115.1 million, or 28 cents a share, from $126 million, or 31 cents, a year earlier, the New Hyde Park, New York-based company said today in a statement. Kimco was expected to have FFO of 30 cents a share, the average estimate of 15 analysts in a Bloomberg survey.

Kimco is selling non-retail investments and increasing its purchases of neighborhood shopping centers. The company last week said it sold A$165 million ($179 million) of Australian real estate owner Valad Property Group’s convertible notes to a Blackstone Group LP affiliate.

“They continue to get rid of things they don’t want,” Rich Moore, an analyst at RBC Capital Markets in Solon, Ohio, said in a telephone interview before the report. “They’re looking at external growth.”

Three Shopping Centers

Kimco bought three shopping centers in the Philadelphia, New York and Baltimore areas in the first quarter for $85.3 million, according to an April 27 statement.

Kimco recorded $17.8 million of “non-recurring” income in the first quarter in the year-ago period, compared with $851,000 in the most recent three months. Excluding that income and impairment charges, FFO rose to $121.2 million, or 30 cents a share, from $115.6 million, or 28 cents, a year earlier.

Vacancies at U.S. neighborhood and community shopping centers rose to 10.9 percent in the first quarter from 10.8 percent a year earlier, according to data from Reis Inc. The rate was unchanged from the three previous quarters.

Kimco owned interests in 948 shopping centers in 44 U.S. states, Puerto Rico, Canada, Mexico and South America as of March 31.

The company announced its results after the close of regular U.S. trading. The stock rose a penny to $19.40 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have advanced 24 percent over the past year, compared with a 15 percent gain for the Bloomberg REIT Index.

(Kimco will hold a conference call tomorrow at 9 a.m. New York time. See KIM US <Equity> EVT <GO>.)

To contact the reporter on this story: Brian Louis in Chicago at blouis1@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

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